Document Type
Article
Publication Date
2-27-2013
Abstract
This essay outlines the rough contours of a conceptually new regulatory scheme based on mandatory pre-market government licensing of derivatives and other complex financial instruments. Contrary to the current approach to regulating derivatives markets, the proposed product approval regime explicitly aims to control the amount and types of risk before it is introduced into the financial system. In that sense, it is a true gatekeeping mechanism, a potentially more effective form of ex ante – as opposed to ex post – regulation of systemic risk in financial markets.
Keywords
derivatives, financial regulation, regulatory reform, Dodd-Frank, product approval, financial innovation, complexity, speculation, systemic risk
Publication Title
Harvard Business Law Review
Repository Citation
3 Harv. Bus. L. Rev. Online 98 (2013).